Auckland group West One tries to get affordable apartment high-rise off the ground

By day Alan Henry is a chemistry teacher. By night he’s a would-be builder of affordable housing.

And he has set his sights high – an 18-storey block of apartments in Auckland.

Henry wants to pioneer a concept he calls “benevolent development”.

The idea revolves around developing a site for a service fee rather than taking a profit, as most developers would.

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By forgoing the profit margin, Henry estimates he can shrink the cost of development down to a tenth of their usual size, keeping the apartments ideally under $550,000.

He also has a site in mind in popular New Lynn. The New Lynn Bible Chapel is in dire need of repair and is looking to essentially do a land swap in return for a community centre and other facilities within the complex.

With land costs taken care of, Henry’s project – named West One – then hinges on the ability to use home buyers’ deposits for building the apartments.

Normally off-the-plan deposits are held in a lawyers trust in case the project falls over.

However, as an altruistic venture, Henry and his team are trying to persuade the Government to provide a “performance guarantee” so that the work would be finished.

It’s a novel idea but Henry says they have already had productive talks with Inland Revenue, Auckland Council and the Ministry of Business, Innovation and Employment about the plan.

“They encouraged us to put in a more substantial report.”

He is now talking to crowdfunder PledgeMe to find about $2 million for architect drawings, legal costs, council approvals and other costs.

The concept has gained the attention of a group of like-minded professionals including architect and former Unitec lecturer Vince May.

May said it seemed wrong to him that $25m of deposits would sit in a lawyer’s trust account earning 1 or 2 per cent interest, while a developer borrowed that same amount at 10 per cent.

A government guarantee would need a lot of controls but Auckland needed innovative ideas like these.

“Why can’t Joe Bloggs just pay to have their house built and take the risks associated with building your house, and that’s it. Rather than a developer having to buy it, and take all the risk,” he said.

Lew Meyer, an elder at New Lynn Bible Chapel, said he saw the idea as a “win-win” serving both the church and the community.

“We’re a little church but we have the ability put up 18 storeys.”

He hoped the Government would back the idea of a performance guarantee.

“I think there would be quite a lot of political capital in them being seen to trying to cool the housing crisis and provide homes. Because this is one of the factors that’s holding back a lot of developers.”

May said Henry’s views on benevolent development and his own differed slightly but their ultimate belief was that these types of projects could help flatten out the housing market.

“If we can put four houses where there’s currently one, and we do that 500 times, it starts to make a significant impact.”

House hunters could put their names down on a register for upcoming projects and relax, dispelling some of the fear of missing out which drove up prices.

“We can’t materialise 40,000 houses in a month. but if we can give people the option to wait … we facilitate that project to happen.”

May is also an advocate of what he calls “lean construction,” and hopes West One will be a chance to showcase more efficient construction techniques.

“At the moment we’re the most expensive, slowest, poorest quality builders on the planet, basically,” he said.

“We’re the only industry in the last 30 years which has specialised everything down to gib stoppers – [which] are now specialist trades.”

Henry said there was little in the project for him except the satisfaction of helping first home buyers get into a home.

“I have children who are doing well professionally but can’t afford to buy their first home,” he said.

He had previously put his own money on the line trying to build 30 houses on a Christian school’s property to offset its costs.

Interest was high and the council was keen, but they could not afford the land when LVR restrictrions were tightened.

“It was a classic development failure.”

His fee, if West One takes off, would be set at the level of his teachers’ salary.

“I have a house in Mt Albert, I have two cars … the things that are important to me are not money.”

Auckland Council declined to talk about the project because it had not yet received an application for consent.